Restructuring the welfare state: are fair reforms coming now?

Friedrich Merz made a surprising discovery this week: social justice. The CDU leader and Chancellor said there is a feeling among the population that things are no longer fair in the country. He said this the day after his party was elected from the Mecklenburg-Western Pomerania state parliament. And when asked, he explained that the coexistence of statutory and private health insurance causes a problem in many people's sense of justice - and that something needs to be done about it. Ohhh.

Does the Chancellor now want to introduce citizens' insurance - insurance for everyone, regardless of whether they are rich or poor, sick or in perfect health? While leading Union politicians quickly tried to explain what the Chancellor really meant - by no means the end of the coexistence of private and statutory insurance - Merz said nothing further.

So what does he, who is called the “Reform Chancellor” on the CDU website, really mean when he talks about justice? And what does that mean for his future actions?

In the 82 pages of the CDU's basic program, social justice appears exactly once: "Everyone should be able to rely on the solidarity community to support them when they really need it." The emphasis here is on “really”. At the same time, there is talk of “personal responsibility” and “activating precaution”, true to the neoliberal spirit that permeates the entire basic program. Many CDU MPs think it is fair to relieve top earners and cut social benefits. And Merz has also been one of them so far.

Thorsten Frei, Union parliamentary group leader since July and previously Merz's head of the chancellery, said this week that justice is multifaceted. He mentioned measures that had just been decided against the abuse of social benefits, including: Anyone who is wanted with an arrest warrant should no longer receive any benefits. The government here defines justice negatively – it’s about what you don’t get for a certain behavior. But what does that mean for those who pay into the statutory social security systems, what for the upcoming reforms in pensions, care and health?

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The SPD sees its criticism of the planned social reforms, which has so far only been expressed only hesitantly, confirmed. It is important to give the plans a “reality check,” said co-party leader Bärbel Bas the day after the most recent state elections. Shortly before, the SPD presidium had met and decided that the reforms must focus on “justice”. The lesson from the election campaigns of the past few months is that one should not try to beat the wall with the planned changes to pensions and health care.

A commission made up of experts and politicians has presented proposals for the reform of the statutory pension. These aim to ensure that we all work a little longer and pay higher contributions, at least initially. In return, those who are still young now should receive an adequate pension when they get older.

However, anyone who plans to retire sooner as a particularly long-term employee will have to expect deductions: the early pension without deductions after 45 years of contributions is to be abolished. Merz and Social Affairs Minister Bärbel Bas unanimously praised the proposals in the summer as a work of art. But the abolition of early retirement after 45 years of contributions in particular proved to be extremely unpopular in the recent state election campaigns.

Three CDU prime ministers and probably the most powerful woman in the SPD, the state mother of Mecklenburg-Western Pomerania, wanted to maintain early retirement without deductions. Manuela Schwesig found abolition unfair and operated with the concept of performance equity: “Those who work the hardest and pay in the longest shouldn’t be the ones who carry the hardest burden,” she said.

Well, that was during the election campaign. And now? Will the pension reform fail because Schwesig continues to stand in the way? Bärbel Bas disagrees. There is “nothing more deadly” than letting the government fall apart over some issue.

If you ask around among specialist politicians in the Union and SPD, there is confidence that they will come together when it comes to pensions. For people who are looking forward to their pension after 45 years of work but are not yet 65, there will be transition periods and hardship rules.

Health and care reform will probably be trickier. First of all, there is the reform of social long-term care insurance, which, like the health insurance savings package before it, is intended primarily to get rising expenses under control. At least for a few years.

On Wednesday, the cabinet wants to pass a draft law that will be passed by the Bundestag and Bundesrat this year. The previously circulating draft bill from the Federal Ministry of Health had already caused a lot of dissatisfaction. One of the most controversial projects was the planned reduction in pension contributions paid for caring relatives. The new CDU Federal Health Minister hastened to delete this point from the draft as soon as he was in office. Carsten Linnemann described the caring relatives as “silent heroes”.

Linnemann also spoke about how important the health system is for social cohesion, that it is made by people for people, that the sick should get help more quickly and that the need to save money should not go unnoticed by those with private insurance. So is the staunchly economically liberal Linnemann, who has previously been criticized as a socio-political hardliner, also one of the converts?

Support from the coalition partner for such a turnaround would probably be expected. The SPD's health policy spokesman in the Bundestag, Christos Pantazis, reacted very happily to Merz's statements. The SPD has been in favor of citizens' insurance for a long time anyway, but for now a solidarity-based balance between social and private nursing care insurance would also be a start. This would mean that the insurance companies, which primarily have healthier and higher-income contributors, give something away - this is already the case among statutory health insurance companies.

The SPD could block the unpopular austerity package next week. Klüssendorf calls for a system into which everyone pays, or at least a “fair financial balance” between private and social care insurance. “We do not accept any reduction in benefits in care,” SPD General Secretary Tim Klüssendorf announced on Friday evening. There's a lot going on when it comes to care, says Klüssendorf. And left it open whether the SPD would actually pass a bill to financially stabilize long-term care insurance in the cabinet on Wednesday.

In the area of ​​health care, there are also improvements to be made to the health insurance savings package that was only passed in July - it should become both more socially acceptable and ensure more savings. They're not enough again. A reform of outpatient care should put an end to the dilemma of long waiting times for specialist appointments. Better control and fewer visits to the doctor overall and a guarantee of timely appointments for those with statutory health insurance, i.e. around 90 percent of people, are up for debate.

In addition, Linnemann also wants to reduce health insurance contributions in the future and has already campaigned in parliament for one or two additional million from the budget. After Merz's statements, Linnemann also made it clear that he would not be taking any major reform steps such as the introduction of citizens' insurance.

A social revolution cannot be expected with black and red. In any case, the CDU does not seem willing to change its fundamental course. The chairman of the Christian Democratic workers' wing CDA, Dennis Radtke, warned: "Everyday worries, affordability of life, functioning, reliable infrastructure... At some point the alarm clock has to ring." But in the by-election of the Union parliamentary group vice-president in the Bundestag, the CDA once again did not get a chance.

Johannes Winkel, the chairman of the Junge Union, was elected as the new deputy group leader on Tuesday. And he made it clear: “Anyone who loses their nerve now and crushes the first tender reform plants in years will have to read a brutal judgment about themselves in ten years.” That sounds like business as usual, no matter what the price – and like new strife in the coalition.

Frank Werneke does not believe that Merz has actually recognized how important it is to seek social balance in the planned reforms. “The Union went into the federal election campaign with incredibly big promises and promised the employers’ associations a lot,” said the Verdi chairman of the taz. These are exactly the expectations that employers would now place on the government. The unions are calling for protests against the cuts plans this weekend. If the government continues with social policy as before, it will not be due to the lack of signals for a course correction.